PV, Mit & Jeff
CREA released January's housing data yesterday. Home sales are down 16.2% year over year. The GTA benchmark price has fallen 8%, its eighth straight monthly decline. Toronto condos are down nearly 10%. And our investors? They collected their monthly distribution. On schedule. As always. Two very different ways to own real estate →
We've been investing with Foundation Capital for the past 7 years, and it's been one of the best decisions we've made for our family. Unlike the stock market, where volatility can feel unpredictable and out of your control, this approach to real estate investing feels tangible, strategic, and backed by real assets. Over the past seven years, they've delivered the consistency in returns they promised. That reliability has protected our hard-earned money and is exactly why we continue to invest more.
Home sales fell 16.2% year over year nationally. The GTA benchmark price dropped to $936,100, down 8% and the lowest since 2021. Toronto condos are down 9.8%, with unsold new condo inventory hitting a record 23,918 units. Meanwhile, the best GIC in Canada pays 3.40%. On $250K, that's $8,500 a year, taxed as income. Not exactly a winning alternative.
FCPRET pays 7% annualized distributions, deposited monthly. On $250K, that's $17,500 a year in cash flow. Our vacancy rate sits under 2% across the portfolio. And our buildings are in Southwestern Ontario, where rental demand stays strong.
But here's what really sets us apart: our buildings are actually going up in value, even in this market. Every time a unit turns over, we renovate it and bring the rent to market rates. That increases net operating income (NOI), and in apartment buildings, NOI drives the property value. We don't need the market to go up to create equity. We create it ourselves, one unit at a time. That's the value-add strategy, and it works in any market: up, down, or sideways.
Add the targeted 8% appreciation from these improvements and you're looking at $37,500 in total return on $250K in year one. That's distributions plus forced equity creation, regardless of what the housing market does.
Cash-Flowing Apartment Buildings · Southwestern Ontario
Targeted Total Return: 12 to 15%
Distributions: 7% Annualized, Paid Monthly
"We've been investing with Foundation Capital for the past 7 years, and it's been one of the best decisions we've made for our family. Unlike the stock market, where volatility can feel unpredictable and out of your control, this approach to real estate investing feels tangible, strategic, and backed by real assets. Over the past seven years, they've delivered the consistency in returns they promised. That reliability has protected our hard-earned money and is exactly why we continue to invest more."
When homeownership gets more expensive and less attractive, more people rent. When condo investors lose money, they panic-list their units as rentals, but those are scattered single units with amateur management. Purpose-built rental apartments are a completely different product. Professional management, stable buildings, long-term tenants. And with new construction starts projected to decline through 2028, the supply of well-located rental buildings is only getting tighter.
For investors looking for equity creation on top of income, the Development Fund takes this thesis further. Wellington Tower is an $80 million purpose-built rental project backed by CMHC financing and government grants, targeting 24% to 27% annualized returns over a 4-year horizon. We started with 50 investor spots. 15 are already committed. 35 remain.
Purpose-Built Rentals · Build-to-Core, 4-Year Horizon
CMHC Financing + Government Grants (De-Risked)
Targeted Returns: 24% to 27% Annualized
Bank of Canada's next rate decision is March 12. Most economists expect a hold at 2.25%, which means GIC rates stay flat and mortgage affordability stays stretched. Both of those conditions push more demand into the rental market. We'll be watching the February housing starts data next for confirmation that new construction continues to pull back.
Yesterday's data tells one story: the Canadian housing market is under pressure. Sales are falling, prices are declining, inventory is building, and buyer confidence is low. But real estate isn't one asset class. It's many. And the type you own determines whether you're losing money or collecting it.
To your success,
PV, Mit & Jeff
P.S. The 2% bonus units deadline is TOMORROW, February 20th. On a $250K investment, that's $5,000 in extra equity just for acting this week. If you've been on the fence, this is the moment. Just reply to this email and say "interested" and we'll set everything up for you.
By the Numbers
